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French court rejects 75 percent millionaires' tax

(Reuters) - France's Constitutional Council on Saturday rejected a 75 percent upper income tax rate to be introduced in 2013 in a setback to Socialist President Francois Hollande's push to make the rich contribute more to cutting the public deficit.The Council ruled that the planned 75 percent tax on annual income above 1 million euros ($1.32 million) - a flagship measure of Hollande'selectioncampaign - was unfair in the way it would be applied to different households.
Prime Minister Jean-Marc Ayrault said the government would redraft the upper tax rate proposal to answer the Council's concerns and resubmit it in a new budget law, meaning Saturday's decision could only amount to a temporary political blow.
While the tax plan was largely symbolic and would only have affected a few thousand people, it has infuriated high earners in France, prompting some such as actor Gerard Depardieu to flee abroad. The message it sent also shocked entrepreneurs and foreign investors, who accuse Hollande of being anti-business.
Finance Minister Pierre Moscovici said the rejection of the 75 percent tax and other minor measures could cut up to 500 million euros in forecast tax revenues but would not hurt efforts to slash the public deficit to below a European Union ceiling of 3 percent of economic output next year.
"The rejected measures represent 300 to 500 million euros. Our deficit-cutting path will not be affected," Moscovici told BFM television. He too said the government would resubmit a proposal to raise taxes on high incomes in 2013 and 2014.
The Council, made up of nine judges and three former presidents, is concerned the tax would hit a married couple where one partner earned above a million euros but it would not affect a couple where each earned just under a million euros.
UMP member Gilles Carrez, chairman of the National Assembly's finance commission, told BFM television, however, that the Council's so-called wise men also felt the 75 percent tax was excessive and too much based on ideology.

Re: French court rejects 75 percent millionaires' tax

Sound familiar folks? It should....In fact the only difference I can see between the new French President and ours, is that at least the French President openly declares that he is a socialist....

Can we borrow those French judges? I may have to change my mind about our courts looking to foreign legal precedents for their decisions.

So, the French have to be treated equally tax wise. A household with two wage earners that both earn a little less than a million would not pay the higher rate, but another household with one wage earner who earns just over a million would.

Note the little jab from whoever wrote that story: "...the Council's so called wise men". I suspect that that so-called reporter hates, hates to see the rich get a break, all legal issues notwithstanding.

Last edited by LowDown; 12-29-12 at 01:52 PM.

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